COURT FILE NO.: CV-17-570060

DATE: January 11, 2021

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: New Generation Woodworking Corp. v. Adam Arviv and Canadian Imperial Bank of Commerce;

BEFORE: MASTER C. WIEBE

COUNSEL: Charles Skipper for New Generation Woodworking Corp. (“New Generation”);

Mark Wiffen, former counsel for Adam Arviv;

PARTIES: Adam Arviv, one of the defendants;

HEARD: January 7, 2021.

REASONS FOR DECISION

[1] At the teleconference on December 23, 2020 I scheduled three motions to be heard by me on January 7, 2021 by videoconference. They all affected the 8-day videoconference trial hearing in this matter that was scheduled to commence on January 12, 2021.

[2] The three motions that I scheduled were the following. The first motion was by Mr. Wiffen to be removed as lawyer of record for Mr. Arviv. I was advised that this motion would not be opposed.

[3] The other two motions were, I was told, contested. There was the motion by New Generation for an order striking the Arviv statement of defence and counterclaim on the grounds of non-compliance with my directions and a failure to appear at the summary trial proceeding which is technically already underway. There was the motion by Mr. Arviv to adjourn the trial hearing as his representative on the conference call, lawyer Dawit Debssou of the Groia & Company firm, advised that Mr. Arviv wanted that to happen to allow him to retain and instruct new counsel. Mr. Debssou advised that Groia & Company was actively considering being retained by Mr. Arviv and was “checking conflicts.”

[4] Mr. Wiffen delivered a redacted motion record in his removal motion to Mr. Skipper and, at my request, an unredacted version of the same motion record to me. This record satisfied me that there had been an irreparable breakdown in the solicitor-client relationship. Messrs. Wiffen, Skipper and Arviv were all present on January 7, 2021. There was no opposition to Mr. Wiffen’s motion from either Mr. Arviv or Mr. Skipper and I granted the order. Mr. Wiffen remained for the duration of the videoconference.

[5] Mr. Skipper delivered a motion record in the New Generation motion. He served it on Mr. Arviv on December 23, 2020 through M. Wiffen. Mr. Wiffen confirmed that the material was forwarded to Mr. Arviv. There was no responding material. Mr. Skipper, also in accordance with my previous trial directions, delivered and uploaded onto Caselines the affidavits for evidence in chief that New Generation would be relying upon to prove its case at the scheduled trial hearing. There are the affidavits of Carlos Areias and Alexandra Desouza, and two expert reports of Travis Walker. Mr. Skipper prepared and uploaded a trial record and the joint document brief (containing the documents to be relied upon at trial). I reviewed that material prior to January 7, 2021.

[6] On January 6, 2021 I received an email from Mr. Debssou advising that the Groia & Company firm would not be representing Mr. Arviv in this matter due to a “scheduling conflict.” Mr. Debssou indicated that he had informed Messrs. Wiffen and Skipper of this information on December 23 and 24, 2020.

[7] At the videoconference on January 7, 2021 there was no written motion material from Mr. Arviv. Also, there was no lawyer in attendance for him. After a short wait on the videoconference, Mr. Arviv appeared by audio link only. He advised at one point that he was calling from his residence in Miami, Florida, and that Groia & Company would not be acting for him as Mr. Arviv said “they were not experienced in construction cases.” That is not what Mr. Debssou advised me on December 23, 2020 or in his email of January 6, 2021. At one point on January 7, 2020, Mr. Arviv verbally asked to have the trial hearing adjourned in order to allow him to retain and instruct new counsel. He said he was approaching “two lawyers in 48 hours,” although he would not give their names after being asked for their names. I asked Mr. Arviv several other questions.

Motions to strike and to adjourn

[8] The New Generation motion is based on the allegation that Mr. Arviv is in violation of my trial directions of September 15, 2020 by failing to deliver the affidavits for the evidence in chief of seven of his eight trial witnesses, the fact witnesses. I had ordered that Mr. Arviv deliver these affidavits by November 13, 2020. The parties subsequently agreed between them to adjust this deadline to December 14, 2020.

[9] It is undisputed that Mr. Arviv is indeed in violation of my directions as he has not delivered affidavits for his fact witnesses at all, even as of January 7, 2021, five days before the scheduled trial hearing.

[10] The following are the additional background facts to be kept in mind:

a) This is a construction lien proceeding which is supposed to be of a “summary character, having regard to the amount and nature of the liens in question;” Construction Act, R.S.O. 1990, c. C.30 (“CA”), section 67(1). The subject project was a millwork improvement in a large luxury condominium located in Hazelton Lanes, Yorkville owned by Mr. Arviv.

b) The New Generation claim for lien is in the amount of $73,767.26. This claim concerns unpaid invoices for contract and extra work. Mr. Arviv delivered a statement of defence and counterclaim. The counterclaim initially was for $86,000 in alleged overpayment, $300,000 in damages and $100,000 in punitive damages. It is undisputed that the damage claim concerns alleged deficiencies. The Arviv pleading went through two amendments, with the last one being on October 4, 2018. In this last version the numbers are removed. Concerning damages, Mr. Arviv pleaded that the amount is “unknown.” The pleadings indicate that it is Mr. Arviv who raises the issues to be determined in this case.

c) Mr. Arviv hired and removed numerous lawyers in this matter. First, there was Marc Kestenberg, who delivered the Arviv pleading. Second, there was Maria Triggiani. Third, there was Mario Middonti, who started his representation in September, 2018 and ended it in December, 2019. Fourth, there was Mr. Wiffen who started his representation in January, 2020 and ended it in December, 2020 about a month prior to the scheduled trial hearing. On January 7, 2021 Mr. Arviv initially said he “did not recall” these lawyers other than Mr. Wiffen. Then he said he remembered the ones other than Mr. Middonti despite the fact that Mr. Middonti represented Mr. Arviv for the first 16 months of this reference and at four trial management conferences. This conduct shows at minimum a lack of interest in and attention to this reference.

d) At the trial management conference on September 13, 2018 Mr. Middonti, on behalf of Mr. Arviv, consented to giving New Generation a site visit on November 20, 2018 without condition. I ordered that a such site visit take place. The purpose of this site visit was to allow New Generation to examine the deficiencies claims raised by Mr. Arviv. The New Generation motion material indicates that Mr. Arviv later unilaterally decreed that Mr. Areias, the principal of New Generation and the one who ran the project, could not attend. Mr. Arviv said on January 7, 2021 that he simply did not want Mr. Areias in his condominium. Others had to go in Mr. Areias’ place as a result. On January 7, 2021, Mr. Arviv tried defending his conduct as being within his right as a property owner, even though he had consented to allowing New Generation a site visit to examine his deficiency claims. This conduct shows that Mr. Arviv has little concern for procedural fairness.

e) At the same trial management conference on September 13, 2018 I ordered the production of a Scott Schedule. The completed Scott Schedule has been produced in the filed Trial Record. The Arviv list of deficiencies in this Scott Schedule contains essentially the same minimal particularity that Mr. Arviv pleaded in his pleading, which undermines the credibility of the Arviv deficiency claims.

f) At the trial management conference on May 21, 2019 I scheduled a nine-day summary trial in this action to take place in late July and early August, 2020 with affidavits for evidence in chief delivered in advance of the hearing. Due to the COVID-19 pandemic, I convened a trial management conference on June 23, 2020, and because the parties and the court were not ready to proceed with the scheduled trial, I vacated the trial schedule. At the trial management conferences on July 31 and September 15, 2020 I re-scheduled the summary trial. A complicating factor was Mr. Skipper’s commitment to a two-month trial in another matter in the North West Territories. At the September 15, 2020 trial management conference, Mr. Skipper confirmed that this other trial was adjourned to start in late April, 2021. This opened up January, 2021 in everyone’s calendar. I gave this case priority to other adjourned trials in my calendar because of the duration of this reference. I proceeded to schedule this summary trial for eight days in January, 2021 again with a schedule for the delivery of affidavits for evidence in chief in advance of the hearing. As a result, there must be a very good reason to delay this trial again, as any delay would be a second delay and would mean a delay of at least eight months given my present trial calendar.

g) At the trial management conference on June 23, 2020 the parties indicated that they both wanted a settlement conference. I ordered one with Master Short that took place on July 23, 2020. According the evidence on the motion, at the settlement conference, Mr. Arviv walked away after one hour.

h) On January 7, 2021 I asked Mr. Arviv as to why he had not produced any of the affidavits for his seven fact witnesses in contravention of my directions. He confirmed that he had received and reviewed my directions. His answer was that he “was too busy doing other things.” He gave no indication he was working on them. He did not blame his lawyers. In short, he, Mr. Arviv, had not given priority to this case. This shows he is not interested in it. He is not prepared to give it the attention it deserves. Indeed, at one point he lashed out saying this case was a “waste of his time.”

i) At another point on January 7, 2021, Mr. Arviv promised to get his evidence delivered in “thirty minutes” if I delayed the trial. I asked why I should believe him given the history of this case, and he replied that “I didn’t have to believe him.” This again showed Mr. Arviv’s lack of care for and appreciation of the gravity of the legal process. It also seriously diminished his credibility.

j) Concerning the trial, New Generation has filed two fulsome affidavits sworn by Mr. Areias and Alexandra DeSouza, the project manager. I have reviewed these affidavits and they show that New Generation worked diligently on its scope, including extras, until mid-December, 2016. At that point the work was nearing completion. There had been no complaints. Then suddenly Mr. Arviv and his wife raised an issue with the lack of lighting in the master bedroom closet and the absence of mirrors and shoe storage space, items that were not within New Generation’s scope. Mr. Arviv then simply ceased paying and ceased communicating. There was no notice of deficiencies; no notice of default; no notice of contract termination. Mr. Arviv simply walked away from the contract, much in the way he walked away from the settlement conference. Based on this evidence, there is a good chance Mr. Arviv will be found to have improperly terminated the contract, thereby disentitling him to any damages.

k) Concerning the one Arviv witness who is an alleged “expert,” Jack Medland, the joint document brief contains a one-page letter from Mr. Medland “to whom it may concern” identifying what he calls deficiencies in the fridge wall, oven wall and five other areas of the kitchen that he says he identified in his site visit of October 9, 2018, some 22 months after New Generation ceased its work. He assessed the costs to correct these deficiencies at just over $22,000. However, there is no Form 53 and no curriculum vitae.

[11] New Generation relies primarily on Rule 60.12(b). This is the rule that authorizes the court to strike a defendant’s defence where the defendant has failed to comply with an interlocutory order. As stated earlier, there is no dispute that Mr. Arviv has failed to comply with my trial directions by failing to deliver the seven affidavits for evidence in chief as I directed, at all. The leading case concerning this rule is Koohestani v. Mahmood, 2015 ONCA 56, CarswellOnt 910 (Ont. C.A.). In this case, the Court of Appeal required that striking pleadings “should not be the remedy of first resort.” It required that the following additional factors be considered:

• The merits of the defence with a “blatantly unmeritorious defence” giving rise to the inference that the failure to comply with the order is a part of strategy of delaying a decision on the merits, thereby justifying the more severe sanction;

• The context of the misconduct with the view to balancing the severity of the response with the court’s overall obligation to seek a just determination on the merits;

• Whether the evidence indicates that it was the lawyer, not the party, who is responsible for the misconduct, with the court to bear in mind the basic principle that an innocent client should not be saddled with the loss of rights on account of an inadvertent lawyer.

[12] I examined these factors in the context of this motion and concluded that the Arviv set-offs and counterclaim must be struck.

[13] Concerning merits, as stated above, I found that the plaintiff’s filed evidence for the trial shows that Mr. Arviv simply walked away from his contract with New Generation apparently blaming the plaintiff for items that were not its fault. As a result, there is a good chance Mr. Arviv will be found to have wrongfully repudiated the contract thereby disentitling him to any damages. Furthermore, the evidence concerning Mr. Arviv’s alleged deficiencies is quite thin. His alleged opinion expert has written a one-page letter written concerning a site visit done 22 months after New Generation stopped working, a letter that concerns only a limited number of apparent deficiencies representing a relatively modest amount of money. As filed, this letter does not even amount to admissible evidence. The Scott Schedule, which should have given a detailed breakdown and description of the Arviv allegations of deficiencies, does not do so at all. It essentially reiterates the Arviv pleading. The Arviv pleading itself went through amendments that ended with a counterclaim that does not have numbers. This all leads me to conclude that the Arviv defence is indeed “blatantly unmeritorious” on its face and that Mr. Arviv’s non-compliance is part of a delay strategy.

[14] Concerning the context of the misconduct, the context could not be more compelling for a severe penalty. Mr. Arviv has essentially not submitted his trial evidence in support of his defence and counterclaim when he is the one who has raised the issues in dispute. He did so with full knowledge of the contents of my directions. He just did not to do the work. This is not “a peripheral issue involving a relatively small amount,” as was the case in Koohestani; see Koohestani, paragraph 61. Furthermore, an adjournment of the trial hearing at this point would undermine the fair running of the trial. As Mr. Skipper pointed out, if I were now to adjourn the trial for eight months, Mr. Arviv would have the unfair advantage of having all this time to review and respond to the plaintiff’s affidavit evidence. Even if I were to give New Generation the opportunity to redo its affidavits, these earlier affidavits will remain on the record and could be used against the plaintiff. Also, for this misconduct to happen after the parties and the court carefully scheduled this trial hearing delaying other trials in the process is a factor to be considered.

[15] Concerning the issue of whether lawyers were responsible for this misconduct, there is no doubt that in this case the misconduct was entirely that of Mr. Arviv. He admitted as much on January 7, 2021. He said he was too busy on other matters to work on his affidavits. He showed a profound lack of interest in this case and lack of appreciation of its gravity. I am not sure he has done any work to prepare his evidence. He even said that this case was “a waste of his time.” This was a part of a pattern of conduct in this reference that shows arrogance and a lack of appreciation of fair process on the part of Mr. Arviv. This was probably the most compelling factor. Mr. Arviv left me with no confidence that he would abide by any future trial directions I may give should I adjourn the trial. Also, to accommodate Mr. Arviv with an adjournment of the trial after he showed such disregard for my directions would be offensive.

[16] Mr. Skipper relied heavily on the case of Rock Precast Erectors Ltd. v. Canadian Precast Ltd., 2012 ONSC 5924 (Div.Crt.). This case was also a construction lien action. The action was scheduled for trial in four months’ time when the lawyer for the defendant corporation obtained an order allowing the lawyer to be removed from the record as the defendant’s lawyer. The order contained the necessary requirement that the defendant obtain another lawyer or leave for a non-lawyer to represent the defendant within a period of 30 days after being served with the order. The principal of the defendant attended a pretrial hearing after the 30-day period and represented that he had retained a lawyer when he in fact had not. At a later pretrial hearing a few weeks before the trial sittings, the principal of the defendant attended without a lawyer and without leave to represent the defendant. The plaintiff then brought a motion to strike the statement of defence for contravention of the removal order pursuant to Rule 60.12(b). The defendant filed no material on this motion. Indeed, he filed no material at any of the previous pretrial hearings. There was also a pattern whereby the principal either arrived at hearings late or left early. The motions judge granted the striking order, and on appeal the Divisional Court upheld this decision.

[17] This is what the Divisional Court said about the decision of the motions judge in paragraph 10: “The import of his order is that he considered the recalcitrance of the defendant sufficient to outweigh his entitlement to a trial. We do not see that he made any error of law, nor did he apply incorrect principals or make any palpable or overriding error of law.” Similarly, in the case before, I find that Mr. Arviv’s arrogance and recalcitrance is sufficient to outweigh his entitlement to a trial, at least a trial of his set-off and counterclaim.

[18] The Divisional Court in Rock Precast in paragraph 14 stated that a self-represented party will be extended courtesies “when circumstances permit.” The Divisional Court stated that, when a self-represented party is in clear violation of an interlocutory order on the eve of trial, attends pretrials late and without material, attends motions without material, makes material misrepresentations to the court, and does not file evidence, the court will be “less than sympathetic.” The Divisional Court concluded with this telling sentence: “When a litigant has done all these things in the face of a looming trial which has long been delayed, it should not be surprised when the court strikes its pleadings.”

[19] I believe I can say the same about Mr. Arviv. Having failed to make any effort to prepare and file his trial evidence in the blatant violation of my trial scheduling order, having let his lawyer end his retainer on the eve of trial without hiring a replacement, having shown a pattern of disregard and disrespect for the legal process in this reference, Mr. Arviv should not be surprised when I strike his pleadings.

[20] Mr. Skipper distinguished the case of Starland Contracting Inc. v. 1581518 Ontario Ltd., 2009 CarswellOnt 3431 (Div. Crt.). In this case, Master Albert made a “last chance” order requiring that the defendant complete certain interlocutory steps. She then made a second “last chance” order requiring that the defendant comply with undertakings and provide particulars of its defence by a specified date, failing which its defence and counterclaim would be struck upon proof on non-compliance with the order. The defendant made an effort to comply with this order. The plaintiff brought a motion to strike and Master Albert granted the motion finding that the compliance was not sufficient given the history of the reference. The Divisional Court overturned this decision finding that there had been substantial compliance with the second “last chance” order as a factual matter. I agree that this decision is distinguishable. Mr. Arviv has made no apparent effort to comply with my trial directions concerning evidence. I do not know when, if ever, Mr. Arviv will be delivering his affidavits. In this case, there has been complete non-compliance.

[21] New Generation also relies upon Rule 50.01(2)(b). This is the rule that provides that, where a defendant fails to appear at trial, the court may dismiss a defendant’s counterclaim and allow the plaintiff to prove its claim. I agree with Mr. Skipper that, being a summary trial, the trial in this case has effectively already begun. The evidence in chief of the plaintiff is already filed, as is the trial record and the joint book of documents. By failing to deliver his affidavits for evidence in chief, Mr. Arviv has effectively failed to appear at trial for the purpose of this rule.

[22] This rule should also, therefore, be invoked. I note that there is authority for the proposition that Rule 50.01(2)(b) is to be interpreted as allowing the court to dismiss a defendant’s defence as well as its counterclaim; see Mignelli v. Scavo, [2004] O.J. 2083 (Sup.Crt. J.) at paragraph 5. However, there is also authority for the proposition that the court may choose to dismiss only the counterclaim where there is no evidence that the plaintiff will be prejudiced by being required to prove its case; see Berky v. Cruz, 2016 ONSC 4067 at paragraphs 3 to 10. I applied these principals in my decision.

Conclusion

[23] For these reasons, on January 7, 2021 I decided to and did strike Mr. Arviv’s set-off claims and counterclaim, but not his defence. I did not see any evidence that the plaintiff will be prejudiced by being required to prove its case with the evidence already filed. I wanted Mr. Arviv to be able to cross-examine New Generation’s witnesses. I denied Mr. Arviv’s motion or request for an adjournment of the trial hearing.

[24] I advised Messrs. Wiffen, Skipper and Arviv of my decision on January 7, 2021. The above are my reasons for this decision.

[25] With this order, the scheduled trial will be reduced considerably as there will be no Arviv witnesses. As a result, I deferred the commencement of the trial hearing by one day, namely to January 13, 2021 to allow the parties, particularly Mr. Arviv, more time to prepare for the hearing. When I made this order, I noticed that Mr. Arviv had already left the videoconference. Mr. Wiffen undertook to communicate my orders to Mr. Arviv.

[26] Concerning costs, I required that the parties file costs outlines forthwith. I will rule on the costs of these motions as a part of the costs determination at the trial.

DATE: January 11, 2021 __________________________

MASTER C. WIEBE